General Steel Holdings Inc · OTC:GSIH
General Steel — Investor Presentation (December 2007)
24 slides from General Steel's investor presentation, Dec 5, 2007
Slide 1: General Steel Holdings, Inc.
General Steel Holdings, Inc. (GSI: AMEX) December 2007
Slide 2: Safe Harbor Statement
Safe Harbor Statement > The forward-looking statements (including Company projections) made in this presentation and any subsequent Q&A are subject to risks, uncertainties and certain assumptions. The Company's actual results may differ materially from those currently anticipated due to a number of
Slide 3: Table of Contents
Table of Contents: ™ Overview ™ Industry Trends ™ Portfolio Companies = Financial Review 2) i a Ss
Slide 4: Overview
Overview <5 = China's first non-government owned steel company - founded 1989 = Controlling interest in 3 steel subsidiaries with an aggregate production capacity of 3 million tons = Main products include rebar, hot-rolled carbon and silicon steel sheets, double spiral- weld pipes = Well positioned
Slide 5: Management
Management learn > ™ Henry Yu: Founder, CEO and Chairman of the Board. First private steel enterprise owner in China (1989), Former CEO of DQ Metal Sheet Co., Ltd.; MBA, BA Business Management, BS in Engineering; China National Representative to Asia Pacific Economic Cooperation (APEC) forum ® John
Slide 6: Investment Highlights
Investment alalaliaiars) = One of the fastest growing steel companies in China. 2007 net income projected at $16.4mm, up from $1.0mm in 2006 as a result of strong organic growth and highly attractive and accretive acquisitions. = One of the leading aggregator of steel companies in China. Recently ac
Slide 7: Industry Trends
Industry Trends
Slide 8: China Steel Demand / Supply
China Steel Demand / Sup) ™ China is the world’s largest producer and consumer of steel products China represents about 40% of global output Forecasted Demand (milion Tons) (Millon Tons) soo 459 470 ay 376 " 829 825 312 a 7 0 amt 2 al x0} 173 a ‘Source: National Statistics & 2007 Stee! industry risk
Slide 9: China steel industry profit and outlook
According to the China Iron & Steel Association, the whole steel industry in China achieved a profit about $21billion, up 30.6% from last year Industry analyst forecasts China’s steel output will increase 7% annually over the next three years and consumption will grow 12% during the same period Glob
Slide 10: Industry Overview
lsleltisiiny Ovarviaw <> ™ China's domestic steel industry is highly fragmented — approximately 1,100 companies -- Currently, the top 10 producers in China only control 34% of capacity, compared to POSCO, the largest producer in Korea with a domestic market share of more than 65% (2005) -- The centr
Slide 11: Portfolio Companies
Portfolio Companies
Slide 12: Corporate Structure
Corporate Sijuciure <> Headquarter: Beijing General Steel Holdings, Inc. Tianjin Dagiuzhuang Metal Sheet Co., Ltd. (‘DQ’) Baotou Steel - General Steel Special Steel Pipe Joint Venture Co., Ltd. (“Baotou”) Shaanxi Longmen Iron & Steel Co., Ltd. Joint Venture (‘Longmen’) General Steel Holdings, Inc, P
Slide 13: Production facilities added in 2006
Production facilities added in 2006 = Located 20 miles from Tianjin — transportation hub of Northeast = 320,390 square feet of building space on 17.8 acres of land. = 50% market share for hot-rolled sheets used in manufacturing light agricultural vehicles = First 9 months of 2007 revenues ona compar
Slide 14: Baotou
Bacio = Strategic partnership with Baotou Iron and Steel Group: a Top-10 steel company in China — 80% ownership position = $5.1 million to obtain majority ownership = Since inception of the JV in May 2007 and commencement of operations in the third quarter 2007 the JV has generated $3.8 million in r
Slide 15: Longmen
Longmen = Largest steel producing facility in Shaanxi province — 2.5 million tons of annualized capacity — 2006 revenue of $705mm and ($988mm pro forma for the first nine months of 2007) Joint Venture assumes existing operations of Shaanxi Longmen Iron and Steel Group Co., Ltd. ~ consolidated June 2
Slide 16: Integrated production capability allows for more cost-efficient production
D> Integrated production capability (from raw material to finished steel products) allows for more cost-efficient production — fewer than 10% of Chinese steel companies have this capability Regional resource bases of iron ore, coke, water, electricity, limestone — approximately 80-90% of iron-ore so
Slide 17: Financial Review
Financial Review
Slide 18: 2007 Highlights
2007 Mighlights ahigkseler anicials Growth Highlights . Longmen: Signed 60% Joint Venture agreement with Shaanxi Longmen Iron and Steel Group, Co., Ltd., Shaanxi Province’s largest steel producer (began operations in June 2007) Baotou: Finalized 80% ownership position in a Joint Venture agreement wi
Slide 19: Summary of Growth in 2007
Sulenenlelny OF Growin i 2007 Source: 100 filed September 30, 2007 No. of Subsidiaries 4 3 Capacity (ton) 400,000 3 million Product Categories 1 main product Diversified product mix Market Share 50% in agricultural Strong presence in several vehicle market markets No. of Sales Offices 3 6 Sales $97.
Slide 20: Income statement summary
Oo) (2) Total Revenue 87,832 89,740 139,495 504,247 Total Cost of Revenue (81,613) (81,166) (135,324) (468,510) Total Gross Profit 6,219 8,574 4a71 35,736 SGA Expense (2,317) (2,781) (2,421) (10,269) Operating Income (EBIT) 3,902 5,793 1,749 25,466 Other Income (44) 6) 2,428 2,291 Interest Expense (
Slide 21: Potential Earnings Impact
Potential Earnings Impact > = Actual vs. Pro forma ‘") condensed income statement prepared according to GAAP 9 mol 1st 9 months P 2007 Pro forma () Actual forma (1) Sales $504.2 $981.7 $1,281.7 Cost of Sales 468.5 906.9 Gross Profit 35.7 74.8 Net Income 10.4 18.0 25.0 (1) Pro forma results reflect c
Slide 22: Consolidated Balance Sheet
Consolidated Balance sti (USD ,000) Assets: Cash and Restricted Cash Accounts Receivable Accounts Receivable Related Party Notes Receivable Inventories Advances on Inventory Purchases Total Current Assets Property Plant and Equipment Total Assets Liabilities: Total Accounts Payable Total Short Term
Slide 23: Investment Highlights
Investment ta ™ One of the fastest growing steel companies in China » 2007 pro forma revenue of over $1.2 billion and pro forma net income in excess of $25 million as compared to $139 million and $1.0 million respectively in 2006 ™ One of the leading aggregators of steel companies in China with an i
Slide 24: Investor Contact / Company Contact
Investor Contact: Company Contact: Matt Hayden Ross Warner HC International General Steel Holdings, Inc. (858) 704 5065 86-10-5879-7346 (Beijing) matt@haydenir.com ross@gshi-steel.com 23
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